Tyson to Kick Off Cattle Herd Rebuild in 2026
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Tyson Foods Inc.’s top boss said a long-awaited push to rebuild the U.S. cattle herd will begin “in earnest” next year — though the meat producer doesn’t expect to benefit before 2028.
Signs that ranchers are starting to retain heifers for breeding are setting a stronger outlook for Tyson’s money-losing beef business, even as it will take another couple of years for the move to translate into increased supplies of slaughter-weight animals, CEO Donnie King said Aug. 4.
Rebuilding the U.S. herd is essential for beef producers. For years, ranchers have slashed herd sizes due to high interest rates, expensive feed and persistent drought. That has created the worst shortage in decades, pushing cattle prices to record highs and squeezing profits as processors struggle to pass on higher costs to consumers.
“We’re poised to capitalize on tremendous opportunity ahead of us,” King said in a conference call with analysts. “Cattle availability should improve in coming years.”
Tyson ranks No. 9 on the Transport Topics Top 100 list of the largest private carriers in North America. Its commentsechothose of larger rival JBS N.V., though recent data from the Department of Agriculture has yet to fully support the more optimistic view. JBS ranks No. 68 on the private TT100.
The family-controlled meat producer has managed to cushion the impact of tight cattle supplies thanks to stronger chicken demand. The company on Aug. 4 raised its full-year earnings forecast by $100 million at the midpoint in a move largely driven by a more optimistic view of its poultry business, which has benefited from low feed costs.
“I don’t think we have peaked in chicken,” King said during the call. “We have capacity to add, to produce more value-added, branded products within our portfolio.”
(Bloomberg)
Tyson, which is widely known for its Jimmy Dean sausages and Hillshire Farm hams, reported quarterly adjusted earnings per share that beat even the highest of analyst estimates compiled by Bloomberg, with its chicken operation posting the strongest result for the period since 2016.
Shares rose as much as 5.7% in New York on Aug. 4, the biggest intraday gain since November, while the stock is still down this year. Tyson said share buybacks have become a “very attractive opportunity” for the company at current prices.
The company lost $151 million on beef in the three months ending June. It was the seventh straight quarter of losses for the operation, the company’s largest. That excluded the impact of a goodwill impairment charge of $343 million.
Tyson has sought to boost efficiency at the operation by shifting further processing volumes back into slaughter facilities, having slashed “controllable costs” by $100 million this year.
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